Sridhar Vembu Warns of Rising Costs as Memory Prices Jump 500% Amid AI Boom

Zoho founder and chief scientist Sridhar Vembu warned that the current AI investment surge could resemble the telecom bubble of the late 1990s, citing memory prices that have jumped 500% over 12 months and rising costs for smartphones and laptops in 2026. Vembu said the AI boom, funded by a post-pandemic credit bubble, has distorted markets from electric power to memory, and he noted that Zoho has so far avoided passing the full cost increase to customers but may find that harder to sustain.

Zoho founder and chief scientist Sridhar Vembu /culture/109020/ashneer-grover-schools-zohos-sridhar-vembu-over-his-clarion-call-for-nris-to-return-india-what-delul has cautioned that the current surge in AI /tech/112942/will-ai-take-your-job-godfather-of-ai-geoffrey-hinton-warns-of-mass-unemployment investment could eventually resemble the telecom bubble of the late 1990s, despite artificial intelligence continuing to develop rapidly. He pointed to the rising prices of smartphones and laptops in 2026 as one indication of how increased AI-related spending and demand are affecting the broader technology market. Vembu Sees Parallels With the Telecom Bubble Vembu believes the current AI investment surge could follow a path similar to the telecom /tech/112296/vi-launches-affordable-rs-200-prepaid-pack-with-ott-access-and-unlimited-5g boom of the late 1990s. He argues that the massive flow of credit into AI infrastructure is driving demand for everything from electricity generation and cooling systems to transformers, memory, CPUs and GPUs. According to Vembu, the technology itself can be legitimate while the investment surrounding it still creates an unsustainable bubble. The sticker shock seen by anyone trying to upgrade their smart phone or laptop in 2026? — Sridhar Vembu @svembu That is the AI investment boom, funded ultimately by the mother of all credit bubbles unleashed post pandemic. It has distorted markets ranging from electric power generation, transformers,… August 18, 2026 AI Could Still Reach Its Full Potential Vembu compared today’s AI cycle with the 1995–2000 telecom investment boom, noting that genuine technological progress did not prevent many telecom equipment companies from failing during the subsequent downturn. He believes AI could face a similar financial correction, while still becoming an important and transformative technology in the long run. For businesses and investors, he says the challenge is to remain optimistic about AI without taking excessive risks during the investment frenzy. Memory Costs Are Making Business Harder Vembu also highlighted the sharp increase in memory prices, which he says has added to the pressure on businesses alongside rising AI-related costs. Referring to reports of memory prices climbing 500% over 12 months, he said the higher costs are making it increasingly difficult for companies to maintain their pricing. Zoho, he noted, has so far avoided passing the full increase on to customers but may find that harder to sustain. Why Software May Need to Become More Memory Efficient The rising cost of memory could also change how software is designed, according to Vembu. He argued that programming languages have traditionally been developed around the assumption that memory is inexpensive and readily available, but that assumption may no longer hold. He believes developers will increasingly need memory-efficient languages and smarter compilers, including for AI applications, without compromising code safety or productivity. ALSO SEE: What Is ChatGPT for Teens? OpenAI’s New Features, Parental Controls and Study Mode Explained /tech/113005/what-is-chatgpt-for-teens-openais-new-features-parental-controls-and-study-mode-explained Tech /tech , OnePlus /oneplus , Oppo /oppo , Telecom /telecom , Xiaomi /xiaomi , Smartphone /smartphone , AI /ai-1 , Zoho /zoho , Sridhar Vembu /sridhar-vembu , Price Hike /price-hike , Memory Price Hike /memory-price-hike